CBB Volume 1: Contents
UG Users Guide
The Bahrain Monetary Agency ("the BMA"), in its capacity as the regulatory and supervisory authority for all financial institutions in Bahrain, issues regulations that licensees are legally obliged to comply with. These regulations are contained in the BMA Rulebook.
The Rulebook is divided into 5 Volumes, covering different areas of financial services activity. Volume 1 (Conventional Banks) covers all conventional banks licensed by the Agency. Islamic banks are covered in Volume 2. Volume 3, covering insurance licensees, was issued in April 2005. Volume 4 is being issued in two phases, starting in April 2006. Representative offices of banks and specialised licensees are in Volume 5, which will be issued in 2007.
This Users' Guide provides guidance on:(a) the status and application of the Rulebook, with specific reference to Volume 1 (Conventional Banks);(b) the structure and design of the Rulebook; and(c) its maintenance and version control.
UG-A.2 Module history
This User's Guide — Module UG — was first issued in July 2004 together with the rest of Volume 1 (Conventional Banks). All subsequent changes to this Module are dated with the month and year at the base of the relevant page and in the Table of Contents: Chapter UG-3 of this Module provides further details on Rulebook maintenance and version control.
A list of recent changes made to this Module are detailed in the table below:
Module Ref. Change Date Description of Changes UG-A.2 1/2005 Update of changes to Module UG-1.2 1/2005 Clearer wording on rules and guidance UG-2.2 1/2005 Sections and paragraphs explained more fully UG-2.3 1/2005 Footers explained more fully UG-3.1 1/2005 Contents pages explained more fully UG-2.3 & UG-3.1 4/2006 Revised dating and update system
UG-1 Rulebook status and application
UG-1.1 Legal basis
Volume 1 (Conventional Banks) of the BMA Rulebook is issued by the BMA pursuant to Amiri Decree Law No. 23 of 1973 (the "BMA Law").
UG-1.2 Status of provisions
The contents of the Rulebook have the formal status either of Rules or Guidance.
Rules have a binding effect. If a licensee breaches a Rule to which it is subject, it is liable to enforcement action by the BMA and, in certain cases, criminal proceedings by the Office of the Public Prosecutor.
Guidance is not binding. It is material that helps inform a particular Rule or set of Rules, or provides other general information. Where relevant, compliance with Guidance will generally lead the BMA to assess that the business has complied with the rule(s) to which the Guidance relates. Conversely, failure to comply with Guidance will generally be viewed by the BMA as tending to suggest breach of a Rule.
The status of each paragraph within the Rulebook can be identified by its text format, as follows:(a) Rules are in bold, font size 12. The paragraph reference number is also highlighted in a coloured box.(b) Guidance is in normal type, font size 11.
The Agency's interpretation of all Rules and Guidance in this Volume is final.
Rules and Guidance contained in Volume 1 of the BMA Rulebook apply to all conventional licensed banks subject to the provisions of the BMA Law, except for representative offices of banks which are subject to the relevant requirements contained in Volume 5 (Specialised Firms) and Islamic banks which are covered in Volume 2.
Where relevant, individual sections of Volume 1 may identify which specific Rules and Guidance apply to particular types of banking licensee.
UG-1.4 Effective date
Volume 1 (Conventional Banks) of the BMA Rulebook was first issued in July 2004. It replaces all regulations previously issued with respect to conventional banks.
For reference, these superseded regulations are listed in the Rulebook, under the 'Regulation history' section of the appropriate Module in each Volume. The list includes the reference number of the previously superseded circular or regulation, its date and subject heading.
UG-2 Rulebook structure and format
UG-2.1 Rulebook structure
The Rulebook is divided into 5 Volumes, covering different areas of financial services activity, as follows:
Volume 1 Conventional Banks Volume 2 Islamic Banks Volume 3 Insurance Volume 4 Investment Business Volume 5 Specialised Activities
Volume 5 (Specialised Activities) covers money changers; leasing firms; factoring firms; representative offices; finance companies; mono-line credit card companies and providers of ancillary services to the financial sector.
Rulebook contents (overview)
Except for Volume 5, the basic structure of each Rulebook is the same. Each Volume starts with a contents page and User's Guide. Subsequent material is organised underneath the following headings:(a) High Level Requirements(b) Business Requirements(c) Reporting Requirements and(d) Enforcement and Redress
Volume 5 is organised by the category of specialised firm concerned.
The material in Volumes 1–4 is contained in Modules, each covering a specific area of requirements (e.g. High-level Controls). In turn, each Module is divided into Chapters, Sections and Paragraphs, as detailed below.
Each Volume has its own appendix Volume containing relevant reporting forms and a glossary.
UG-2.2 Volume structure
Rulebook Volumes are subdivided into Modules, arranged in groups according to their subject matter, underneath the headings listed in paragraph UG-2.1.3 above.
Each Module in a Volume is referenced using a two-letter code which is usually a contraction or abbreviation of its title. These codes are used for cross-referencing within the text.
Each Module consists of chapters, categorised into two types:(a) A standard introductory chapter (referenced with a letter: e.g. UG-A); and
The introductory chapter summarises the purpose of the Module, its history (in terms of changes made to its contents) and, where applicable, lists previously issued circulars and regulations that were replaced by the Rulebook Module.
Sections and paragraphs
Chapters are further sub-divided into Sections (numbered consecutively after the Chapter number: e.g. FC-1.1, FC-1.2, FC-1.3 etc). In turn, Sections are sub-divided into Paragraphs (numbered consecutively after the Chapter and Section numbers: e.g. FC-1.1.1, FC-1.1.2, FC-1.1.3 etc.). Where appropriate, sub-section headings may be used, to guide the reader through a Section: sub-section headings are italicised and unnumbered, and act purely as an indicator (without limitation as to the status of the paragraphs that follow.
Table of contents
Each Volume's contents page lists all the Modules contained within it (Part A), and the information contained in the relevant appendix Volume (Part B).
The contents page of each Module lists the chapters, section and, in some Modules, sub-sections it contains, and the latest date of each section in issue.
UG-2.3 Format and page layout
The top of each page in the Rulebook identifies the Volume, Module and Chapter in question. Each Module is a separate document. New Chapters start on a fresh page.
The bottom of each page in the Rulebook (on the left hand side) identifies the Module in question, its section and page number. Page numbering starts afresh for each Section: the total number of pages in each respective Section is shown as well as the individual page number. The bottom right hand side shows an issue date. The Contents Page for each Module is given its own separate version number. In addition, the Contents page lists the latest issue date for each Section in that Module. The Contents page thus acts as a summary checklist of the current version in force for each section. Further explanation is provided in Section UG-3.1 below.
Defined terms used in the Rulebook are underlined. Each Volume has its own glossary listing defined terms and giving their meaning. Definitions of terms used apply only to the Volume in question. It is possible for the same term to be used in a different Volume with a different meaning.
Cross-references are highlighted in yellow. Two active cross-references are shown in Paragraph UG-2.3.5 below. Any cross-references given in a text state the Module code, followed by the numbering convention for the chapter and section being referred to. For example, the cross-reference FC-1.2.3 refers to the first Paragraph in the second Section of the first Chapter of the Financial Crimes Module. Many references will be quite general, referring to a Module or Chapter rather than a specific Paragraph.
Each paragraph is assigned a complete reference to the Module, Chapter, and Section, as well as its own paragraph number, as explained in UG-2.3.4 above. The format of the paragraph reference and paragraph text indicates their status as either a Rule or Guidance, as explained in UG-1.2.4 above.
UG-3 Rulebook maintenance and availability
Changes to the Rulebook are made quarterly. After the end of each calendar quarter, the BMA automatically reissues the contents page of each Module. Users can thus determine whether they have access to the latest version of these pages, by checking that they have those marked with the most recent date.
The contents page of each Module lists the current date of each Section. The Module contents pages thus act as a checklist for users to verify that they have the current requirements.
Where changes to the regulations are required, then the affected pages are re-issued, alongside the contents pages for each Module. Where possible, only the relevant Section or Chapter is re-issued, rather than the whole Module.
A summary of any changes made to a Module is included in the 'Regulation history' section of each Module. The table summarises the nature of the change made, the date of the change and the Module components affected.
The updates are posted to the BMA website, together with a summary of changes for that quarter. Licensees are in addition e-mailed the summary of each quarter's changes. Hard-copy users are required to print off the updated pages from the website to incorporate in their Rulebook in order to keep it current. The website version of the Rulebook acts at all times as the definitive version of the Rulebook.
UG-3.2 Rulebook availability and ordering details
Order forms for CD-ROMs and hard copies are included in an annexure to the Users' Guide (please refer to the end of this module).
Please complete all relevant boxes on the order form, taking particular care to provide full contact and address details. The completed form should be sent (accompanied with the appropriate payment) to:
Rulebook Section — Licensing & Policy Directorate
Bahrain Monetary Agency
PO Box 27
Kingdom of Bahrain
Tel: + 973 - 17 54 7413
Fax: + 973 - 17 53 0228
The Rulebook is available on the BMA website, on CD-ROM-and in hard copy.
ANNEXURE â€” BMA Rulebook Order Form
INSTRUCTIONS Please complete all relevant boxes, taking particular care to provide full contact and address details. The completed form should be sent (accompanied with the appropriate payment) to: Bahrain Monetary Agency
(Rulebook Section, Licensing & Policy Directorate)
PO Box 27
Kingdom of Bahrain
For enquiries, please contact:
Phone: +973 - 17 547 413
ORDER REQUIREMENT Rulebook Volume Number Hard-Copy1: number required (at BD 110 each) CD-ROM2: number required (at BD 5 each) Cost: 1 — Parts A & B Conventional Banks 2 — Parts A & B Islamic Banks 3 — Parts A & B Insurance Licensees 4 — Parts A & B Investment Business Licensees (Due 2006) 5 — Parts A & B Specialised Licensees (Due 2006) POSTAGE The above prices include postage for delivery within the Kingdom of Bahrain. Postage for international orders will be charged at cost: please contact the BMA (see above) for details of rates and delivery options. 1: Hard copy subscribers are provided the latest version of the Rulebook Volume(s) ordered, which they can then keep up to date by printing off new or amended pages from the BMA website (www.bma.gov.bh).
2: CD-ROM subscribers are sent the latest available version of the complete Rulebook (i.e. the CD-ROM contains all Volumes that have been issued).
Total Cost: ADDRESS / PAYMENT DETAILS Name Institution (if applicable) Full Postal Address
Contact e-mail / telephone / fax E-mail:
Please remember to enclose your payment with the order Payment should be by cheque drawn on a Bahraini-licensed bank, payable in Bahraini Dinars. Cheques should be made out to "Bahrain Monetary Agency". Persons ordering from outside Bahrain should contact the BMA (see above) for postage rates and payment options.